It is hard for many people to imagine that cash could completely disappear from circulation, but it is possible. It turns out that all around the world, more and more people prefer use cashless payments.
Europe as an example
Europe is increasingly focused on giving up cash. On European continent, on average 50% of transactions are cashless. Scandinavian countries lead the withdrawal of physical money from trading – as much as 80% of payments are made there without using traditional form of payment.
Governments and institutions around the world are more than happy to introduce electronic alternatives of traditional payment method. The costs for the national economy related to its printing and distribution are high – Mastercard estimates them even at 1.5% of GDP. Retailers and banks spend billions every year on processing cash transactions and maintaining the infrastructure to handle them. And electronic payments are not only a cheaper alternative to coins and banknotes, but also an opportunity for traders and consumers to eliminate the risks associated with the security of cash storage. Electronic technologies make payments transparent, easily verifiable and traceable, which brings clear benefits to both personal and national finances. In addition, the data generated by electronic payments are a potential gold mine for businesses looking for new ways to contact consumers.
Cards – are they still necessary?
Credit and debit cards were the link between the physical and digital worlds, enabling a new era in the history of payment services. But they are also currently facing an uncertain future. Consumers are increasingly using new forms of payment and services, which means that there is a high risk that cards will lose their dominance in terms of market share. The use of smartphones and social media is conducive to the transition to no-card payments, both in developing and developed markets. In response to this threat, payment card systems are increasingly turning towards non-cash payments and are developing services such as instant payments or integrated with IoT. And while cards will not disappear in the near future, alternative payment methods will certainly become more important over time.
Cards in eCommerce
Over the past five years, the eCommerce industry has more than doubled its value. To get something from this amount you have to be better than the competition. You can make it just by implementing modern payment systems. Solutions that primarily care for the safety and convenience of the customer. E-Commerce is certainly not an industry for people who do not yet have and do not intend to implement cashless payments.
Non-cash transactions save your money
With new interchange fees, the cost of running your store can drop significantly. With a turnover of EUR 50,000 a month, you can save up to EUR 500. Within a year it is 6,000, which is already a very interesting amount. All you have to do is start encouraging customers to use cashless payment methods.
The current payment revolution is still focused on human interaction, while the next phase will focus on solutions using IoT and artificial intelligence. In the medium term, we will also see an extension of the current payment framework to allow ‘access’ to consumers’ bank accounts, which of course requires their consent. Basically, however, this will happen without human intervention, whether using a device or AI software. For example, a networked fridge can order food automatically when it detects that the product is running low. Cars connected via IoT to the payment system will be able to pay parking fees and tolls without interacting with the driver. This is another step towards a cashless and self-service society.